BP Exec Calls LNG 'Fundamental' To U.S. Market
BP North America Gas & Power President Tony Fountain said last week that the role of liquefied natural gas was "fundamental to our North American markets," and indicated that the company is reviewing "several opportunities for LNG terminals" along the West Coast and East Coast. BP joins El Paso, Chevron and other companies that have announced similar LNG plans in response to high domestic gas prices.
"We see an opportunity to help California if we put an LNG terminal on the West Coast," said Fountain at the Ziff Energy Group North American Gas Strategies Conference. Without submitting a time frame, Fountain said BP thinks the United States is a prime location for more LNG activity.
"The LNG prospect is in the future down the road, but it would probably help a terminal's chances to be located along the West Coast if Alaska selects the highway route for its (natural gas pipeline) project. It's not the next thing off the block for us, but the political stability in the United States helps the LNG market here," he said.
Speaking of LNG's ability to compete with existing and future natural gas supplies, Fountain said that North America's growth was strong enough to handle it. "North America's natural gas demand is more than India, Brazil and China put together. It is truly an incredible, dynamic market." Pipeline imports and LNG will have to be part of the supply mix that North America will need to meet its expected 30 Tcf demand by 2009, Fountain said.
BP already produces LNG in Trinidad, and is now reviewing options on a LNG project in Egypt. BP is also subscribed for about one third of the total capacity at the Cove Point, MD terminal, which is being reactivated. The terminal, mothballed in 1980, is expected to accept its first tankers in 2002.
Andy Flower, a special adviser to BP on global LNG prospects, told a London audience this week that BP has identified three possible LNG sites in the United States, but said he did not expect anything to be completed before 2005 at the earliest. The proposed terminals at a minimum would be able to handle 3 million metric tons/year in capacity, Flower said.
If BP muscles its way onto the North American LNG scene, it will find some heavyweight companies. In recent months there has been a frenzy of activity, including plans upgrade the CMS Trunkline terminal in Lake Charles, LA (see related story), and recommissioning two mothballed terminals: the Cove Point terminal and Southern LNG's terminal at Elba Island, GA.
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